Thousands of insurance customers to receive €900 boost from Royal London insurance if plan agreed

Policyholders of a leading insurance company can look forward to a financial subsidy worth almost a thousand euros.

Around 93,000 people with old Royal Liver, Caledonian Life and some Irish Life policies will receive an average top-up of €900 on their policies if the plan is approved.

They get access to that money when their policies mature, when voted on.

The payments are being proposed by life company Royal London in Ireland and are to be voted on by post, online and at a policyholders’ meeting in Dublin on 20 October.

It came about through the takeover of Royal Liver by Royal London, which was approved in Germany in 2011 by the then competition authority.

Royal Liver then became part of Royal London, the largest mutual life, pension and investment company in the UK.

Royal Liver, the Liverpool insurance company that built the famous building on that city’s waterfront, used to have a huge insurance operation in this country, with premiums collected door-to-door by people known as the Liver Men.

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Caledonian Life was then acquired by Royal London as a takeover of Royal Liver and renamed Royal London.

Royal London is a mutual society, meaning it is owned by its members and any excess financial profits go to its shareholders.

Now the 93,000 policyholders here who have endowment policies, lifetime policies and annuities can vote on a proposal to add value to the plans.

A pot of money is created that was held back as a “rainy day fund” at the beginning of the takeover process

There have already been some so-called distributions of funds from the Royal Liver acquisition to Irish policyholders.

These were in 2013, 2018, 2019 and earlier this year, with the amounts paid into policies depending on the size of the person’s policy.

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But this latest is the greatest.

It arises because a pot of money that was held back as a “rainy day fund” at the beginning of the takeover process is now released in case there were any claims against the company.

These funds are known as an estate.

Royal London said: “Whenever there is more money in the estate than is required, the extra money will be shared with eligible policyholders by increasing the underlying value of their policy.”

The mutual said that if the offer goes through, it will make a final distribution from the estate to eligible policies.

This would increase the underlying value of these policies by 23.1 percent.

And it will be paid out in December, if approved by policyholders.

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According to Royal London, the figure of 23 per cent represents an average increase of just over €900 based on an average eligible policy value of €4,000.

Some policies are under €100, others are very large at over €100,000.

So the implications for policyholders depend on the size and type of policy they hold.

Royal London emphasized that the so-called “uplift” is not a cash payment.

It increases the value of the individual’s policy and they benefit when the policy is claimed.

If the offer goes through, it will be the final distribution.

If the proposal is rejected by policyholders, eligible policies may continue to receive distributions from the estate in the future, but the amount and timing of those distributions remain uncertain, Royal London said.

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